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The Book on Negotiating Real Estate

When the real estate market gets hot, it’s the investors who know the ins-and-outs of negotiating with sellers who will get the deal. This book combines real-world experience and the science of negotiation to cover all aspects of the real estate negotiation process.

What should I offer my investor???

from Oak Creek, Wisconsin

posted 12 months ago

I’m looking to purchase an 8 unit apartment building. Purchase price is $250K . I have talked to a friend of mine and he is willing to put up $50k for the down payment. My question is, what should I offer him in return for his down payment. He doesn’t want to be involved at all with the property. I’ll be handling everything (maintenance , new tenants ..etc) Anyone have a similar scenario? I have the cash for down payment myself, however I can put that to use elsewhere , so I’d like to take his investment. Thoughts??

Flipper/Rehabber from Pittsburgh, PA

You are looking at the problem backwards. Ask him what he will accept. You might want to compare this to leaving the money in the bank, or a CD, where he will be less than 1% interest.

If you give him a better return than any bank in America, backed by the security of real estate, purchased below its actual value, and backed by your personally, what is the least he would accept as a return?

from Kingston , Ny

replied 12 months ago

You have a friend offering money to invest. Think of this as a private money deal. Ask THEM what their terms are. What return do they want? You will want to give them a lien position in case the deal goes to pot. I have an acquaintance going in with me on a deal and she wants 10% and first lien position. But she has more experience than I do.

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